Municipalization

Ponnequin Wind Farm

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Definition

The process by which a community assumes the control of its electrical generation – usually from an investor-owned utility

“Municipal electric systems are owned and operated by the communities they serve. Locally elected or appointed citizens act as the board of directors for municipal systems, and aided by professional staff, they make policy and operational decisions that are in the best interests of their utilities and communities. Municipal utility systems are non-profit and self supporting (not funded through municipal taxes), and as such, municipal utilities qualify as enterprises under the Colorado Constitution. The local city councils or utility boards set the rates for their communities’ utilities. The rates cover the costs and expenses of providing the electric service including, generation and purchase power costs, electric transmission and distribution costs, capital expenses, debt service and operating costs. Any remaining revenues, after expenses, are reinvested into the community in a variety of ways.”

Background

There are 29 municipal electric systems in Colorado, which serve approximately 18% of the state’s electric customers. Learn more about the history of municipal electricity in Colorado here.

Current News

Boulder, CO is considering its energy future: enter into a new 20-year franchise agreement with Xcel Energy or become its own municipalized utility. Through the approval of ballot measures 2b/2c in 2011, voters asked the city to explore different options that could deliver our community clean, reliable, low cost, local energy.

Over the past year, teams of world-class consultants and community stakeholder working groups began an unprecedented analysis of the challenges and opportunities of possible solutions–including creating a local power utility. For three of the studied municipal options, a city utility’s costs would be significantly lower than Xcel’s leading to rates that were better, on average, over this entire timeframe. Two municipal options that called for the most aggressive environmental action did not meet this test, so staff is not recommending that a utility start with them. The city has hired an independent, third-party evaluator to determine whether there is a reasonable likelihood that Charter requirements related to creating a local electric utility can be met. The selected firm is expected to identify any items city staff may have missed and provide feedback about resource and financial assumptions in order to ensure the analysis completed to date is solid.

The third-party evaluator found that the Base Case Materials and City Demonstration Models confirm that the the Charter requirements can be met. See the Third Party Review Findings 7-22-13 powerpoint.

Gainesville Regional Utilities, known as GRU, is a multi-service utility owned by the City of Gainesville. They are the 5th largest municipal electric utility in Florida. Check out their renewable energy initiatives.

Aspen, Colorado

Aspen, a municipalized community, is at 75% renewable energy and has a goal to reach 100% by 2016 using hydropower facilities and offshore wind power. More information here.